What variables shape luxury consumer behaviour in China? An empirical study on luxury consumption in China towards luxury fashion goods

The rapid growth of the Chinese economy in recent decades has brought benefits for
luxury retail companies. The rise of the middle class has considerably increased investment in
luxury goods, positioning the country as a near world leader in luxury goods consumption. The
economic effects of this behaviour will be analysed in this paper. Therefore, theories such as
the law of demand of Marshall and the Giffen goods paradox will be studied as part of the
behavioural economics (Stigler, 1947). This science seeks to provide an answer to human
financial decisions through psychology and sociology. Moreover, this paper will determine
what the Chinese luxury market entails as well as the meaning of 'luxury' and its importance in
the Chinese culture. Afterwards, consumer behaviour will be analysed through theories such
as conspicuousness, subjectivity to normative influence, or pragmatism, among others.
The main objective of this work is to determine what drives the Chinese population to
such a high consumption of luxury goods. The second objective is to analyse the luxury
consumption of young Chinese people in order to determine whether there are new influences
that drive this part of the population to consumption. This will be of great value both for
behavioural economics and for luxury firms seeking to capture the young consumer, as they
will be able to shape their corporate and marketing strategy accordingly. As part of the study,
qualitative research will be carried out through semi-structured interviews in order to find a
solution to the research gap. Finally, the results will be analysed, and a conclusion will be
provided with a recommendation for future research on the topic.